Telecommunications Sector to See $30 Billion Growth in Digital Infrastructure by 2027

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Welcome to this week’s edition of the Thomas Index Report.

The Telecommunication sector continues to demonstrate strong market increases in 2022. According to recent reports from GMI, digital infrastructure is projected to grow from $90 billion in 2020 to $120 billion in 2027. This $30 billion expansion is attributed to a number of tech-related trends, including the increased integration of cloud computing, the Internet of Things (IoT), as well as major upticks in mobile phone use across the globe.

In particular, the demand for future generation services and devices, such as 5G and smart technologies, is expected to exceed $50 billion over the next five years.

The Broadband Internet Technical Advisory Group reports that COVID-19 — which resulted in a dramatic and immediate rise in remote work and learning — has also been a contributing factor in this unprecedented growth. With more people hunkering down at home, there has been a corresponding demand for faster and more efficient connectivity. Social distancing requirements due to COVID-19 restrictions have also escalated digital entertainment and media consumption among residencies around the world. Going forward, the Pew Research Center reports that, while pandemic restrictions are lifting, the demand and consumption of digital services will continue well into the future.

The rapid increase in internet traffic at both corporate and residential levels has, in turn, spurred government action. The Federal Government’s $1 trillion Infrastructure and Jobs Act has specifically earmarked $65 billion to expand and improve telecommunication services, particularly among suburban and rural communities. As the dependency on network services shows no signs of abating, the demand for greater cybersecurity is also increasing. Companies, in particular, are looking to beef up their systems and patch security vulnerabilities in their corporate networks.

With the rise in digital densification, we see a parallel increase in sourcing demands for telecommunication equipment and related products. On the Thomasnet.com platform, sourcing for telecommunications-related equipment reflects a surge of 253% from last year. Bundled in this dramatic increase, we see robust traffic in the sourcing of copper coaxial cables, fiber optics, batteries, patch cords, switch boxes, and consoles.

I’m Cathy Ma, and this is the Thomas Index Report.